The 2017 Lennart Meri Conference’s opening panel discussed the prospects of the European Union in an ever-changing environment, the challenges it faces internally, and its direction in terms of more coordinated defense. Speakers included EU foreign policy high representative Federica Mogherini, President Kersti Kaljulaid, and former Italian prime minister Enrico Letta.

Kaljulaid: European Union not dysfunctional

There was nothing fundamentally wrong with the European Union, President Kersti Kaljulaid said at the Lennart Meri Conference’s opening session on Friday evening.

Estonia's experience with the economic crisis had been that it came out of it stronger than before, and the same stood for the EU, for instance with regard to the issue of the Schengen area, Kaljulaid said.

The union had reached the understanding that the external border needed to be strengthened, and information needed to be shared, she added.

Looking at the EU's other activities, Kaljulaid said that it was apparent that decisions had been made quickly, for instance reaching a common position regarding the United Kingdom’s planned exit from the union, and imposing sanctions on Russia in connection with the crisis in Ukraine.

"When we look at the hard facts, there is absolutely no reason to say that the European Union is in crisis, that it is not functioning, that it is terribly deficient, that our policies are misguided," Kaljulaid said. The president added that this was Estonia’s message on the state of the union as well.

According to Kaljulaid, there is indeed room for development in the EU, because the world is constantly changing. It would never be finished, and the same applied for the EU. But together, the union could do more than bilaterally.

Letta: Macron’s victory turning point

The victory of Emmanuel Macron in the French presidential election represented a turning point since the Brexit referendum and the election of Donald Trump, former Italian prime minister Enrico Letta said at the conference.

"I was shocked by two slogans of the Brexit camp and the Trump campaign, which are two different subjects linked by one word—'the past'," Letta said, talking about the campaign catchphrases "Take back control" and "Make America great again”.

Macron's victory, on the other hand, had been won by his proposing the future, Letta said, which he found impressive.

"Macron won proposing the future, his ideas are for the future. That he defeated the old parties gives him a big mandate to convince the Germans, especially after the Sept. 24 polls, that it is possible to move without the legitimate fears about the attitude of some Latin friends," Letta said.

"We want to share economic policies and investments, and share the fact that the EU means responsibility and solidarity together," he added, highlighting the motto of the upcoming Estonian presidency of the EU: "Unity through Balance."

Letta also said that the EU had to make decisions and address the non-cosmopolitan parts of its member states’ populations.

"There are many people who don't speak three languages, who don't travel or work in other countries, and who don't want to be cosmopolitan," he said, adding that the euro needed to be a tool for growth and to get young people into work.

The union was about to get a window of opportunity after the German elections, Letta said.

Poland, Hungary can’t be allowed to blackmail EU

Letta was very clear about the reactions called for after the increasingly nationalist policies of the Polish and Hungarian governments. The two countries couldn’t be allowed to blackmail the other member states, otherwise the 19 of them that make up the euro area would choose the path of faster integration, Letta said, hinting that Poland and Hungary may find themselves left lagging behind.

"The Visegrád countries are today taking some positions that are different from those of the rest of the member states. We have been too weak towards them," Letta said, answering a question to the opening panel of the Lennart Meri Conference on Friday about the governments of Hungary and Poland.

Letta added that one of the problems with the European Union was that its council was too powerful. Not all member states represented the interests of the union on the council, but first and foremost those of their own countries.

"It is also important for our Polish and Hungarian friends to understand that it is not possible to blackmail the others, because there will be an outcome. And the outcome will be a more multi-speed Europe and a stronger Europe of 19," Letta said.

Mogherini: EU defense investments too fragmented

The union’s foreign policy high representative, Federica Mogherini, opened Friday’s conference panel. Mogherini called for better defense coordination within the EU, and more effective defense spending.

"The European Union still believes that NATO is the bedrock of European security," Mogherini said. "But there is also the idea that Europeans have to do more for their own security."

"Europeans invest 50 percent of what Americans invest in defense. The European output on defense is 15 percent. Why? Because we invest in a fragmented manner," Mogherini said.

Better cooperation would mean that the member states could finally find an economy of scale for their defense industries and research programs.

“This would finally provide a basis for European defense. This is something only the EU can do that will benefit member states, NATO, our American friends, and our security and the security of our citizens," Mogherini said. "This is exactly what we are doing now—using the instruments the EU has, but has never used."

The European Union was not a military alliance and didn’t want to become one, Mogherini stressed. "But we want to make more effective use of the instruments and the resources we have.”

Commenting on the current security situation in Eastern Europe and relations with Russia, Mogherini said it was important to make progress within the format of the Minsk agreements.

"At the moment the important thing is to push for (…) the implementation of the Minsk agreements. To support the French and the Germans in this difficult exercise. To help our Ukrainian friends to deliver on their side. And to push the Russians to deliver on their side," Mogherini said.

She also stressed the key role of the Organization for Security and Cooperation in Europe (OSCE) in Ukraine and the EU's support of it.

According to Mogherini, Russia's real bet was that the Ukrainian state would collapse from the inside as a result of the war. "This is not happening, because we are supporting the reform processes inside Ukraine, and those inside Ukraine that have a reform agenda, that are tackling the core structural problems," she said.

Chairman of the Social Democratic Party (SDE) and former minister of health and labour, Jevgeni Ossinovski expects poverty in Estonia to decrease as an effect of the current government's income tax reform, though the actual impact will become clear only after data is evaluated next year.